What to do if the terms of our loan changed after being taken over by a new lender?

We refinanced our loan to combine 2 loans into 1 and locked in at 5.25% 2 years ago. However that bank went under and with our new lender that took over, we are not locked in at 5.25; it is up over 7%. Additionally, for some reason, we still have 2 loans. One at 7% and the other at 12%. We never signed anything with the new lender when they took over the initial lender’s business. What can we do? We are behind on our payments now.

Asked on September 10, 2011 under General Practice, New Hampshire


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You need to carefully read your loan agreement when you refinanced your loan several years ago and the promissory note that you signed that presumably is secured by a mortgage or trust deed on your property in that its terms control the rate of interest that you agreed to pay for the loan you received under the stated amount of years for it.

Even though you may have locked in at a 5.25% rate of interest several years ago for the initial rate of interest, for the loan to to have increased as to its interest rate it means that you most likely have a variable interest rate as opposed to a fixed rate.

If you had a mortgage broker assist you when you refinanced several years ago, you need to contact him or her to explain further your loan and if it was a fixed or a variable rate and why you supposedly have two loans instaed of the one that you thought you wer getting.

You also need to read carefully the final closing statement for the refinace you did several years ago so you can further understand the type of loan you received.

Good luck.

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